Unlike fiat currency, cryptos do not exist in the physical world. Instead, cryptocurrencies are actually powered by a decentralized ledger known as the blockchain which records all past transactions and changes in ownership.
And this is what allows cryptocurrencies such as Bitcoin and Ethereum to be transferred instantaneously from one user to another.
Since it doesn’t make use of existing financial infrastructure, crypto is exceptionally useful for those looking to perform anonymous transactions. Unfortunately, this makes crypto wallers a favorite target for hackers.
This is because tokens can easily be stolen and whisked away which leaves individuals with basically zero legal recourse. You can check here a guide on the safest wallets available: blog.tezro.com/safest-crypto-wallets/
Besides that, there are also a few things you need to keep in mind when using crypto tokens:
Cryptocurrencies are extremely volatile. The issuance and distribution of cryptocurrencies is not controlled by any one authority. Instead, cryptos operate on a decentralized network which provides them with a remarkable level of flexibility.
But at the same time, this makes them extremely volatile and prices can suddenly shift with zero warning. So be sure to keep that in mind if you intend to invest in these digital currencies.
Crypto assets may not be legal in your country. Before you start using cryptocurrencies, be sure to check with your local monetary authority. The lack of regulation and control surrounding cryptos has caused a significant amount of government consternation.
Because of this, many governments have actually outlawed cryptocurrencies. So, keep that in mind lest you fall afoul of the law.
How To Keep Your Cryptocurrencies Safe?
1. Do some research into your wallet of choice
There are hundreds of different crypto wallets out there in the market. And choosing the right one can easily get overwhelming.
But don’t worry, the best way to know which one is the right one for you is by doing some research. Tech sites will regularly review the latest wallets available and forums like Reddit often have discussions posted by other crypto enthusiasts.
Points that you should look out for when choosing a wallet should be:
- Track record. Has the wallet faced any issues with security breaches and hacks in the past? If security is something of an issue, consider another wallet.
- User experience. How does navigating the wallet feel? Is it user-friendly or clunky? Can you easily access your tokens and send/receive payments?
- Security features. The best crypto wallets often feature 2FA or multi-factor authentication to prevent unwanted access.
2. Protect your wallet with a strong password
A strong password is difficult to crack and protects your cryptocurrencies from unwanted access. Ideally, your password should consist of numbers, symbols, and capital letters.
Avoid using obvious bits of information like birth dates, social security numbers, or names of loved ones. And never use the same password to protect multiple accounts and devices.
3. Regularly update your passwords
As a rule of thumb, you should change your passwords every 3 months. Many of us make the mistake of continually using the same password without updating it. This makes it easy for cyber criminals to crack your passcode and gain access to your wallet.
4. Never use public or free wi-fi
Public wi-fi is a favorite target for hackers looking to intercept your personal data. And this is why it’s important to avoid using public wi-fi where possible. If you need to access your bank accounts or crypto wallet, then avoid using public wi-fi and only do it from home.
5. Invest in a cold wallet
A cold wallet is one of the most cost-effective ways of securing your cryptocurrencies. Unlike a hot wallet, cold wallets store your tokens offline which makes it impossible to hack into. As an added plus, you can also physically secure your cold wallet for extra protection.
But do keep in mind that a cold wallet connected to an infected computer is still vulnerable to cyberattack.
Protecting your crypto wallet and assets is easy if you know which steps to take. At the end of the day, it all comes down to practicing good online security hygiene and staying alert.